Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Sunday, April 23, 2017

Article on Fiduciary Duties in Social Enterprise

Fiduciary socialAndrew S. Gold & Paul B. Miller recently published an Article entitled, Fiduciary Duties in Social Enterprise, Cambridge Handbook of Social Enterprise Law (Forthcoming 2017). Provided below is an abstract of the Article:

This chapter examines theoretical and practical issues relating to fiduciary administration in social enterprise. It argues that social enterprise often calls for fiduciary administration on a hybrid model, combining elements of service-type administration and governance-type administration. Like standard service-type situations, social enterprise calls for administration in the interests of a defined constituency (ordinarily, shareholders). However, hybridity is introduced through the commitment to general public-oriented purposes that distinguish social enterprise from conventional business organizations. We will show that, contrary to common opinion, the fiduciary hybridity found in social enterprise is neither unique nor unworkable. We will briefly discuss other examples of hybrid fiduciary relationships and institutions, and we will explain the value of hybridity and how problems attributed to it are, or may be, resolved.

April 23, 2017 in Articles, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Friday, April 14, 2017

Personalizing the Client Experience

Personalize client experienceProactive personalization is often behind the scenes and based on the notion that the ideal service model is not right for everyone. Preferences for each individual client should be sought out for those important clients by asking narrow, service-related questions. These questions should be geared toward considerations like contact frequency, communication mediums, types of events, types of connections, and COI recommendations. Ultimately, a planner should start with the service model framework and then make small adjustments to personalize the communication.

See Stephen Boswell & Kevin Nichols, Personalize the Client Experience with These 5 Questions, Wealth Management, April 12, 2017.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.

April 14, 2017 in Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Wednesday, April 5, 2017

Article on the Duty to Inform After Dudenhoeffer

Duty to informRemy Grosbard recently published an Article entitled, The Duty to Inform in the Post-Dudenhoeffer World of ERISA, 117 Colum. L. Rev. 79 (2017). Provided below is an abstract of the Article:

The Supreme Court's 2014 decision in Fifth Third Bancorp v. Dudenhoeffer rejected a long-held presumption in the U.S. circuit courts that fiduciaries of employee stock ownership plans (ESOPs) act prudently in investing in company stock. Instead, the Supreme Court held, ESOP fiduciaries should be subject to the same duty of prudence as all ERISA fiduciaries, leaving ESOP fiduciaries vulnerable to plaintiffs testing the new standard.

To reduce the likelihood of suit from employees invested in employer stock, companies attempt to insulate themselves from liability by appointing independent fiduciaries. One way that plaintiffs, who may have suffered serious losses from downturns in their employer's stock, can still successfully assert breach-of-fiduciary-duty claims is by alleging that appointing fiduciaries have a duty to inform appointed fiduciaries of material nonpublic information that would adversely affect stock price.

This Note considers this claim and argues that courts should refrain from creating a per se rule against the duty to inform. Instead, courts should uphold such claims when securities laws would independently require disclosure. Principles of trust law, guidance from the Department of Labor, and the Supreme Court's holding in Dudenhoeffer support this proposal.

April 5, 2017 in Articles, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Tuesday, March 28, 2017

Article on Wills, Trusts, Guardianships, and Fiduciary Administration

SurveyMary F. Radford recently published an Article entitled, Wills, Trusts, Guardianships, and Fiduciary Administration, 68 Mercer L. Rev. 321 (2016). Provided below is an abstract of the Article:

This Article describes selected cases and significant legislation from the period of June 1, 2015 through May 31, 2016 that pertain to Georgia fiduciary law and estate planning.

March 28, 2017 in Articles, Estate Planning - Generally, Guardianship, Professional Responsibility, Trusts, Wills | Permalink | Comments (0)

Monday, March 27, 2017

Do Your Mutual Funds Have Exposure to Controversial Weapons?

WeaponsOver 6,500 funds that were sold to retail investors around the world have been found to have high exposure to controversial weapons, casting doubt over the asset managers’ efforts to invest responsibly. Specifically, the research reviewed the global mutual funds’ exposure to chemical and biological weapons, cluster munitions, white phosphorus, laser weapons, nuclear weapons, and several more. The research also found that 6,678 mutual funds had at least 5% of their portfolio invested in companies that either manufacture or distribute these weapons. Experts are worried that this callous way to make a profit will do nothing to restore trust in the financial services industry.

See Aime Williams, Mutual Funds Have Exposure to Controversial Weapons, Financial Times, March 26, 2017.

March 27, 2017 in Current Events, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (1)

Monday, March 20, 2017

Article on Fiduciary Law's Mixed Messages

Fiduciary law2Evan J. Criddle recently published an Article entitled, Fiduciary Law’s Mixed Messages, Research Handbook on Fiduciary Laws (Forthcoming 2017). Provided below is an abstract of the Article:

Nearly a century ago, Judge Benjamin Cardozo famously declared that fiduciaries bear a "duty of the finest loyalty" that is "unbending and inveterate" and "stricter than the morals of the marketplace." Some legal scholars argue today that Cardozo's uncompromising formulation of the duty of loyalty should be consigned to the ashbin of history because it does not accurately capture how courts enforce the duty in practice. Although courts routinely invoke Cardozo's famous dictum, they rarely hold that a fiduciary has violated the duty of loyalty absent an unauthorized conflict of interest or other flagrant abuse of power. To skeptics, these features of judicial practice suggest that Cardozo's moralistic rhetoric is a misleading distraction that should be abandoned in the interests of promoting precision and transparency.

This Chapter draws on republican legal theory to propose a fresh justification for the divergence between fiduciary law's strict requirements for fiduciary conduct and its more deferential standards for judicial review. Fiduciary law's "unbending and inveterate" legal requirements are necessary to affirm that fiduciaries lack authority to dominate their principals and beneficiaries. But courts should defer to fiduciary decisions in contexts where judicial intervention is more susceptible to arbitrariness—and, hence, more dominating—than fiduciary decision-making alone.

In particular, the degree of deference courts accord to fiduciary decisions should turn on two considerations:

(1) whether or not the fiduciary has been entrusted with discretionary power to decide the relevant issue; and

(2) whether the fiduciary or the judiciary is in a better position to resolve the relevant issue in a manner that tracks the principal’s purposes and the beneficiary’s best interests.

Guided by these considerations, the Chapter outlines a general framework for determining when courts should apply strong deference, weak deference, or de novo review to fiduciary decisions.

March 20, 2017 in Articles, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Monday, February 27, 2017

Article on the Rights & Duties of Homesteaders, Life Tenants & Remaindermen

Co-tenantGus G. Tamborello recently published an Article entitled, “A House Divided”: The Rights and Duties of Homesteaders, Life Tenants & Remaindermen, 9 Est. Plan. & Community Prop. L.J. 29 (2016). Provided below is an abstract of the Article:

Anyone who has dealt with decedent’s estates for any considerable period of time has likely confronted one or all of the following scenarios: 

  1. A. A person dies intestate owning separate and community property, leaving behind a surviving spouse, from a second marriage that does not get along with the decedent’s children from a previous marriage; 
  2. B. A person dies owning community and separate property, and the decedent’s will leaves it to someone other than a surviving spouse;
  3. C. A person either dies intestate leaving several surviving descendants or has a will devising property to the children or grandchildren in equal, undivided interests; 
  4. D. A person devises only a life-estate to someone, or a surviving spouse inherits a life estate in one-third of a real estate, and the remainder passes to individuals with whom the life-tenant does not get along. 

Each of these common scenarios give rise to competing interests, particularly concerning real estate and, more particularly, with respect to the homestead. This article will explore the often confounding relationship between the homesteader, the life tenant, or both, and the remaindermen or co-tenants. This article will also discuss the various rights and duties among them.  


February 27, 2017 in Articles, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Sunday, February 19, 2017

Article on New DOL Fiduciary Rule & Estate Planners

Fiduciary estate planningJamie P. Hopkins recently published an Article entitled, Be Wary When Giving Investment Advice to Clients: Estate Planners May Run Afoul of the Department of Labor’s New Rule, Tr. & Est. (Feb. 2017). Provided below is an abstract of the Article:

In April 2016, the Department of Labor (DOL) finalized its long-awaited conflict of interest rule and related prohibited transaction exemptions, expanding the definition of fiduciary “investment advice” under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. While the new rules were primarily developed in an attempt to further regulate the advice provided by professionals in the financial services industry with respect to individual retirement accounts, the newly expanded definition of “investment advice” will inevitably cover advice commonly by estate planners. As a result, estate-planning attorneys, who already owe their clients a high standard of care and duty of loyalty under most state laws, could be subject to more stringent fiduciary requirements under federal law, creating new liability concerns. 


February 19, 2017 in Articles, Current Events, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Thursday, February 16, 2017

Article on the Republican Theory of Fiduciary Law

Fiduciary lawEvan J. Criddle recently published an Article entitled, Liberty in Loyalty: A Republican Theory of Fiduciary Law, 94 Tex. L. Rev. (Forthcoming 2017). Provided below is an abstract of the Article:

Conventional wisdom holds that the fiduciary duty of loyalty is a prophylactic rule that serves to deter and redress harmful opportunism. This idea can be traced back to the dawn of modern fiduciary law in England and the United States, and it has inspired generations of legal scholars to attempt to explain and justify the duty of loyalty from an economic perspective. Nonetheless, this Article argues that the conventional account of fiduciary loyalty should be abandoned because it does not adequately explain or justify fiduciary law’s core features.

The normative foundations of fiduciary loyalty come into sharper focus when viewed through the lens of republican legal theory. Consistent with the republican tradition, the fiduciary duty of loyalty serves primarily to ensure that a fiduciary’s entrusted power does not compromise liberty by exposing her principal and beneficiaries to domination. The republican theory has significant advantages over previous theories of fiduciary law because it better explains and justifies the law’s traditional features, including the uncompromising requirements of fiduciary loyalty and the customary remedies of rescission, constructive trust, and disgorgement.

Significantly, the republican theory arrives at a moment when American fiduciary law stands at a crossroads. In recent years, some politicians, judges, and legal scholars have worked to dismantle two central pillars of fiduciary loyalty: the categorical prohibition against unauthorized conflicts of interest and conflicts of duty (the no-conflict rule), and the requirement that fiduciaries relinquish unauthorized profits (the no-profit rule). The republican theory explains why these efforts to scale back the duty of loyalty should be resisted in the interest of safeguarding liberty.


February 16, 2017 in Articles, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)

Friday, January 20, 2017

Article on Gig Employees & Their Retirement Benefits

Gig economyPaul M. Secunda recently published an Article entitled, Uber Retirement, U. Chicago Legal Forum (2017). Provided below is an abstract of the Article:

The rise of the gig economy with its part-time, itinerant, independent workers, in conjunction with the employee-centric nature of occupational retirement benefits under ERISA, has led to gig employees largely lacking meaningful retirement benefits. Current proposals to provide portable benefits to gig workers as independent workers or independent contractors are unacceptable because such benefits would not be secured by the fiduciary consumer protections of ERISA. 

However, two developments with regard to the retirement security of the gig workers are promising. First, there is now increasing examples of gig workers being found to be common-law employees under tests like ERISA’s Darden test. As common law employees, gig workers are entitled to the reporting and disclosure, vesting, funding, and fiduciary protections of ERISA. Second, the use of an open MEP model, in which pooled employer plans (PEP) have a pooled plan provider (PPP) as the named fiduciary, are gaining growing bi-partisan acceptance. This article encourages Congress to promptly adopt the open MEP model, free of current regulatory restrictions, so that gig employees can enjoy retirement security with the peace of mind that ERISA fiduciary protections provide under industry-wide gig employee open MEPs.


January 20, 2017 in Articles, Current Events, Estate Planning - Generally, Professional Responsibility | Permalink | Comments (0)